High public deficit not uncommon

Based on data over the first three quarters of 2011, the Dutch public deficit was 4.4 percent of the gross domestic product (GDP), i.e. the market value of all goods and services produced in the Netherlands. The Netherlands has exceeded the 3 percent deficit-to-GDP ratio, imposed by the European Union, for three years now, but such a prolonged period of high deficits is by no means uncommon.

Deficit relatively rare

The euro countries agreed in the Maastricht Treaty that the public deficit should not exceed 3 percent of the GDP. Since the Maastricht Treaty became effective in 1993, the Dutch public deficit has exceeded 3 percent limit six times. 
In the preceding years, deficits were more common. In the period 1980-1990, for example, the public deficit had been above the 3 percent level for 11 years in a row. With 9.2 percent, the highest deficit level was reached in 1995. This was predominantly caused by a non-recurrent lump-sum subsidy payment to housing corporations. Since the coming into force of the Maastricht Treaty in 1993, an annual public surplus occurred five times. In the twenty-four years prior to 1993, this happened only once.

Public balance sheet since 1969

Public debt 64.5 percent of GDP

The euro countries also stipulated that public debt should not exceed 60 percent of the GDP, but for the third year running, the Netherlands has failed to comply. By the end of the third quarter of 2011, the Dutch public debt had run up to 64.5 percent of the GDP. Four years ago, the public debt-to-GDP ratio reached the lowest level ever (45.3 percent). The public debt level is however still far below the nearly 80 percent recorded in the early 1990s.

Public debt since 1990

Per capita debt in the Dutch population doubled in two decades

The per capita debt in the Dutch population stood at more than 23 thousand euro at the end of the third quarter of last year, i.e. twice as high as in the early 1990s. The GDP per capita has risen even more rapidly over the same period.

Per capita debt in the Dutch population

Léonard Haakman